Moody's rates Liberty Mutual notes Baa2

Moody's investors Service said it assigned a Baa2 rating to $750 million of 30-year senior notes being issued by Liberty Mutual Group, Inc. The outlook is stable.

Proceeds are expected to be used to repay short-term financing in connection with the recently announced reinsurance transaction with National Indemnity Co. and for general corporate purposes.

The agency said Liberty Mutual's ratings are based on the group's solid market position in both commercial and personal lines insurance as the third-largest property and casualty insurance group in the United States, its significant international presence as the second largest U.S.-based property and casualty insurer with international operations, the breadth of its product and distribution platforms and the group's overall good asset quality.

These strengths are tempered by the insurance group's below-average underwriting profitability in its commercial lines segment relative to peers, by its somewhat elevated operational and financial leverage relative to tangible capital, by exposures to losses from natural and man-made catastrophes and the potential for adverse reserve development on some of its long-tail casualty lines, Moody’s said.

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